Gates, in the region to rally support for Iraq's government and counter Iran's growing influence, arrived in Jordan on Monday.

"We had very wide-ranging conversations," Gates told reporters after meeting the king.

On Iran, the two sides "agreed that diplomatic and economic pressure was the most profitable way to get Iranians to change their behaviour," the defence secretary said.

The focus of their talks on Iraq was "the current situation ... and how we can make it work".

"I think that there is not yet confidence in the region that Iraq's government represents all Iraqis," Gates said. "The more encouragement (Iraq's) neighbours can provide (and) the more they support the Iraqi government," the more representative the government would become.

US officials have expressed displeasure over the pace of reconciliation in Iraq. Gates, however, was more diplomatic in his wording on Tuesday.

"The most concrete manifestations of the reconciliation process would be progress on key pieces of legislation," Gates said, referring to the hydrocarbons law, the revenue-sharing law and legislation on de-Baathification.

Sharing Iraq's vast oil wealth among the country's divided communities and reintegrating members of the former ruling Baath party of Saddam Hussein are particular bones of contention in the new Iraq.

Gates said he was last in Amman in 1987, when he was deputy CIA director, by invitation of the late King Hussein, King Abdullah's father.

A senior US military official in Gates' delegation said Washington wanted its Arab allies Jordan and Egypt to show more public support for the government of Iraqi Prime Minister Nuri al-Maliki.

King Abdullah, meanwhile, "stressed to the defence secretary the importance of advancing peace in the region in accordance with a two-state solution to the Palestinian-Israeli conflict," the palace said in a statement.

The issue "remains the core conflict in the region and international and regional actors should make the establishment of an independent Palestinian state a priority in order to realise regional peace and stability".

The king called for support for the Saudi-inspired Arab peace initiative.

An Arab summit held in Riyadh last month offered Israel peace and normal ties with Arab countries in exchange for withdrawing from Arab land occupied during the 1967 Six Day War, the creation of a Palestinian state and the return of refugees.

Abdullah and Gates also "reviewed the situation in Iraq and the efforts exerted to foster security and end the cycle of violence", the palace said, but did not mention talks on Iran.

The United States is seeking to drum up greater Arab public opposition to Iran's controversial nuclear programme and to Iranian support for the Hezbollah militia in Lebanon.

Washington has accused Iran of fomenting sectarian violence in Iraq and supporting anti-US insurgents in the country, charges denied by Tehran.

Gates also downplayed the exit of radical Shiite cleric Moqtada al-Sadr's anti-American faction from Iraq's coalition government.

"There is an opportunity to turn what might seem like a negative potential into a positive development," said Gates.

"Anything that can be done that advances the reconciliation process, perhaps including broadening representation in the cabinet, would probably be a positive thing."

Gates added: "But that is a judgement that the Iraqi leadership is going to have to make. It's really their business."

Gates is next scheduled to travel to Egypt and Israel.